SEED Capital Investment Credit Program

The SEED Capital Investment Program provides tax incentives for investing in innovative business located in the Minnesota border cities of Breckenridge, Dilworth, East Grand Forks, Moorhead, and Ortonville.

Investors may receive a 45 percent tax credit on their investment, up to $112,500 per year. The credit is non-refundable and may be carried forward up to four years.

Eligibility

To be eligible, a company must:

Add value to a product, process or service

Increase revenue to a Minnesota business through sales to customers outside Minnesota or through sales to new customers who previously could not purchase the product or service from a Minnesota business

Have its principal office and a majority of its business activity, or a significant operation, in a border city

Have Minnesota residents as a majority of its employees at its principal office

Rely on innovation, research, or the development of new products and processes for its growth and profitability

Use the investment for plant, equipment, research and development, marketing and sales activity, or working capital

Application Process

How the Program Works
Each border city determines the amount it has available for enterprise zone tax reductions and confirms that amount with Department of Employment and Economic Development. Then each city allocates a portion of that amount to the SEED Capital Investment Credit and annually notifies DEED of the allocated amount.

When a business applies to DEED for certification as a qualified business, here is the process that follows:

DEED provides a certification letter to qualifying businesses

Investor invests in the certified qualifying business

The business reports to DEED and to Minnesota Department of Revenue that a qualifying investment has been made and provides the investor with the required investment verification form

DEED reports to the border city that a qualifying investment has been made

Each border city tracks aggregate qualifying investments and its SEED credit allocation remaining